A Family Business: A Conversation with Aaron and Jeff Swanson, PRO-TECH Design and Manufacturing

Tyler Mason
Hello, and welcome to the newest episode of the Medical Alley Podcast. My name is Tyler Mason. I'm glad to be joining everybody today. And we have I think first in Medical Alley podcast history, the first set of brothers on the show. I'm excited to have Aaron and Jeff Swanson of PRO-TECH Design and Manufacturing. Aaron is the President Jeff is the vice president of sales. Jeff based here locally in Minnesota and Aaron is in from California. So I'm glad this worked out to have you guys in studio. How are you doing today? 

 Aaron Swanson  01:44

Doing good. Glad about the weather. I was a little nervous about coming.

 Tyler Mason  01:47

Yeah we're recording this early December, and it's about 50 degrees outside. So yeah, you brought the warm weather with you. Yeah, well, thanks for joining me today. So let's just start out, you know, PRO-TECH, as I mentioned, based in California, but you do have close ties to Minnesota. I guess maybe Aaron, we'll start with you just talking about the families and the company's ties to this area here.

 Aaron Swanson  02:05

Yeah, it's a little bit of a family story. We were founded in Southern California in 1980. Our mother moved to California from Minnesota. So our entire family was here, I grew up here, Jeff grew up here. She founded PRO-TECH in 1980 as more of a packaging design company, did some brokering and some materials worked through that we got our first facility, I think in 1984. And then did a lot of just packaging design. We did some machine job work. We were kind of a job shop for that, working in the medical industry, but not so much on finished medical devices. I went off to college, also at University of Minnesota, and joined the company in 2001, after being a research scientist and running a packaging materials biocompatibility group. And I wanted to bring, start doing contract packaging, you know, sterilization, all this stuff that I was doing on the market. But I didn't have a place to do that. So I did that within the four walls of the family company. We built cleanrooms in this is 2001. And started what we know now is our contract manufacturing organization. So we started doing contract packaging, assembly, sterilization, that's my background, so that was an easy fit for us to help folks out and start building their product, not from so much offering components or materials, but doing finished package label medical devices. 

 Tyler Mason  03:28

Jeff, I'll let you handle this one. So PRO-TECH kind of, I guess, established a Minnesota footprint in 2022, I believe it was, with the purchase of Surgical Technologies. Tell me a little bit about why investing in Minnesota presence?

 Jeff Swanson  03:40

Well, it's kind of simple. We all started from Minnesota, I had always lived in Minnesota. So when I joined the company in 1995, I was on the road for ever. So when it was, it was really nice to we got offered an opportunity for Surgical Technologies. And we really couldn't jump on it any faster because it just kind of brought a full circle back to Minnesota where we belong.

 Tyler Mason  04:03

And now Aaron, I'll go back to you for this but just kind of explain to the listeners what PRO-TECH is or what you guys do and maybe who who are the companies and the clients that you work with.

 Aaron Swanson  04:11

So we're a contract manufacturing organization. Our bend is really packaging sterilization and labeling. So we help folks from you know, the inception of their device. We're good at designing packaging, we're good at sterilization. And we've grown from there. So we you know, we grew as a company from probably 200 square feet and 1980 to 30 plus thousand square feet. And then we actually did a we opened a new facility in Texas in 2012. So that was our first big move. And so that put us in two states, still doing the same thing. So taking devices or components, managing supply chain, putting them together, but selling the finished sterile device at the end of the day. And we also put — what makes PRO-TECH a little different is we operate our own laboratory as well. And so with my background, I said well, a lot of them least testing and things that were painpoints getting through outside laboratories, let's bring that testing in house. So we started doing that. And then, you know, with the acquisition in 2022, that put us in three states. So that was a big kind of increase for us and our first M&A as a family company. But the the difference between us and maybe some of our competitors is we really do put a family spin on it. We treat our customers like family, our biggest customer in 1980 is still our biggest customer now. Obviously there's higher sales. But that relationship is really important to us. 

 Tyler Mason  05:32

Yeah, the relationship piece he talked about just you know, when I started here at Medical Alley I was newer to healthcare, but I found just how important relationships are. And it sounds like I mean, you talked about a 40 year relationship with a client, it sounds like that's a pretty key piece for you guys as well.

 Aaron Swanson  05:45

It is, and it's the norm. So when we call it onboarding, we onboard new accounts, it's really giving them full access to all of us. I mean, our major accounts generally get access to an owner, if they need to elevate or do anything like that. So we really do keep an eye on our accounts. And that's, you know, been the history of our growth, it's really been building on an existing customer base by working with new accounts and then making them successful.

 Tyler Mason  06:07

And Jeff, anything you want to add just as far as the capabilities or kind of the company that what you guys do, and maybe from kind of your expertise and your background?

 Jeff Swanson  06:13

Well, one thing we've always tried to do is change with our customers. So if our customers need something, we always tried to adapt it. Nobody ever knows everything. So we're always willing to try something new. And that's kind of been our model since day one.

 Tyler Mason  06:29

Very cool. So PRO-TECH has been around, as we talked about for over 40 years, which is impressive. Medical Alley is celebrating its 40th anniversary and 2024. So just a couple years behind you guys, but what are some of the major changes you've seen in the medical device industry in that time? I guess maybe Aaron, if you want to take that one.

 Aaron Swanson  06:44

Obviously the the growth and the level of sophistication. Quite a lot in regulatory. Regulatory changes have been something we've had to keep up with. Packaging technology, you know, the equipment we used to use, the techniques we used to use 40 years ago, obviously, to stay competitive in a global market, you have to adapt and change, and you have to be efficient. And so part of the as we move forward, it's, you know, really trying to compete not only with US companies, but international companies. And so you have to know what you're doing. From your design standpoint, you have to be manufacturable, but also efficient. And so, you know, people often think of packaging as an afterthought, too often we get people come to us, and they'll bring us something they've been working on for years. And they want to launch in two months. And not in this regulatory environment. And you know, we're good, but there's just reality we have to deal with. And so that's been a change to and levels of sophistication on our accounts too is looking at, okay, this isn't a simple process necessarily. You can say, I'm just going to put it in a pouch, or I'm just going to put it in a tray. And you can do that. But to do it well. And to do that efficiently takes some real knowledge that we've developed over the years. 

 Tyler Mason  07:51

On that note, the packaging piece. I mean, that's something I think I don't necessarily think about just from my perspective, but you mentioned a lot of clients, maybe it's not the first point of their agenda either. But tell me a little bit more about just the significance of that, as far as you know, the med device industry.

 Aaron Swanson  08:07

I'll just talk about our customer base first and I can kind of dovetail into that. We work with large, medium, and small. You know, our top accounts, some of them are multibillion dollar corporations. We do a lot of mid cap work, we also do a lot of work with startups. And it's best to feed your pipeline in that way. So you have your sort of stable companies, you have your mid cap companies, and then the folks you really believe in their products. And we can help them along the way to be successful. And I think that's something that really kind of helps keep our customer base stable as well.

 Tyler Mason  08:34

Jeff, any other thoughts that you've seen about the changes in the medical device industry, you know, in your time, either with the company or just kind of throughout your career?

 Jeff Swanson  08:40

I think one of the largest changes I've noticed is in labeling and globalization. Globalization has changed everything. Because everything has to be in separate languages. The labels seem to grow larger and larger every year. So just staying on top of that is probably very high in the list of changes that I've seen. 

 Tyler Mason  09:02

Sure. Interesting. Yeah, I hadn't thought about the language piece of it. But that's a good point as well.

 Aaron Swanson  09:06

And standards as well. You know, when you sell into the Canadian market, and the Chinese market and the Australian market, so there's differences in how their standards are others globalization, but there's little bends in each one. And so, you know, you look at next year, in I think February, we have a week long Brazilian audit, which is unusual. We've never done that before. But when you're selling into all these markets as the primary CM for these companies, we need to be available to do that kind of thing and support them from a regulatory standpoint, no matter who their market is, 

 Tyler Mason  09:35

How's your Portuguese? 

 Aaron Swanson  09:36

Not great.

 Tyler Mason  09:39

Kind of the same question but with the contract manufacturing and the product development industry. What changes have you seen there over over time?

 Aaron Swanson  09:45

So product development, we don't do a lot of actual product development. But what we're starting to do now more is get ourselves involved earlier in the development process, not as the primary but as a support to who's doing the development. So PRO-TECH traditionally, we're not developing the actual medical device. We're being tagged later for manufacturability and for packaging. So one of the changes that we're doing internally is launching a deeper push into the development cycle for our clients to make sure that we don't get to the end of the day of something that may be functional, but not manufacturable. Or at least not manufacturable efficiently. So you know, rather than just saying, 'Here's a drawing, go build this,' it's 'Let us get involved more when you're learning how to put this together so our engineers can look at it and say, let's make sure that if we're going to make this at scale, that we can support you and we can make sure that your cost effective.'"

 Tyler Mason  10:35

Jeff, anything you want to add on on that piece?

 Jeff Swanson  10:37

I would have to just kind of follow with Aaron on it that. Very big point is manufacturability. If you're making one part, it's very simple to do anything you want. If you want to make 10,000 of them, it really does make a big difference to work with an engineer in the manufacturing background.

 Tyler Mason  10:58

I want to ask about supply chain. Obviously, there's been big disruptions in the supply chain in recent years, how is pro tech kind of adapted to some of that disruption and the constraints in supply chain? 

 Aaron Swanson  11:08

Well, it was difficult, and you had to be nimble. We added another warehouse in California, and I'm sure lots of CMOS did that, I mean, in order to combat longer lead times, and these were situations where four or five week traditional lead times went to eight, nine months. And so we obviously had to stockpile, we had to buy smarter. PRO-TECH uses a lot of what we call our stock materials that we validated on our equipment. So somebody new coming to us, I don't have to wait for a lead time to get some packaging materials or boxes or trays. I can use what I have from stock. But we've also added more sophistication in our forecasting of material to make sure that our folks can manage that. So you know, I'm no longer reliant on — just in time inventory doesn't really exist right now, although it's getting better. We just have to go as the person at the end of the rope, who's going to be the one that's going to ship that product, we have to make sure we can't run out of anything. And that's been the real push. It's gotten better. But we had a lot of lessons learned over the last three years to make sure that we absolutely don't run out of stuff.

 Tyler Mason  12:05

Now you guys just joined Medical Alley in 2022, I believe or excuse me, 2023, this year. Jeff, maybe if you want to speak to his white PRO-TECH decided to join Medical Alley. 

 Jeff Swanson  12:16

Yeah, I've looked at it for quite a while. And it really didn't make sense when we are manufacturing in California and Texas. It's kind of, we had customers here. We had quite a few customers here. But our presence here was not local. Even though things are globalized, we weren't truly local. So once we were - once we acquired STI, it just made sense to get a more local base to jump in more with with all the people here, and just get our name out there quite a bit. 

 Aaron Swanson  12:50

And it is interesting when, you know, Jeff would say or other sales folks too, when they go to, you know, local trade shows and things that the Minnesota market really does like working with Minnesota companies. And us as a Minnesota family, we really wanted to be a part of that. So, you know, finally we had the presence, we can get out, you know, if we say we're a California based company, but we really want your business, that's fine, but they really liked that local spin. That's what's unique about Minnesota.

 Tyler Mason  13:15

Well, I'd be curious for your into being obviously from Minnesota originally, but living in California now, your view of this region over the years and you know, Jeff obviously has been experience it close up but just from afar, what's kind of been your take on this region as a you know, med tech med device hub?

 Aaron Swanson  13:30

Oh the growth has been explosive. I mean, you see a lot of very large OEMs here. And it's just a great market is a great culture too, with, you know, us being a family company. It sort of fits here. Our mentality is a Midwest mentality. Although we're a California based company, and all of the owners are from the Midwest. And so that just sort of fit with what we see locally as well.

 Tyler Mason  13:52

Or talked about the family connection, obviously, for his brothers on the podcast. Jeff, as I asked who is the older one, Jeff is, is the older of the two, my brother and I had our first kind of overlap of our careers this year, he was at one of our networking events for Medical Alley, which is kind of cool for me. But I'm curious what it's like for the two of you to to work together.

 Jeff Swanson  14:08

It's very exciting, because not too many people get a chance to work with family. All of our outing events, we get to spend time together. Aaron comes back here a lot. I go back to California a lot. So it's really nice. It keeps our families close. It keeps us close. I wouldn't have it any other way.

 Tyler Mason  14:28

Aaron I was gonna ask you the same question.

 Aaron Swanson  14:30

Yes. What's interesting is in even in the very beginnings of PRO-TECH, I'm not a salesperson. You know, there's some things that he'll do and I'm like, I just don't love going to sales events. It's you know, I'm an inside person. I love operations. And you see by our titles, he's always been in sales. He's very good at it. My thing is technical, and I love you know, working on processes and things like that. So we don't necessarily argue or fight because we come from different camps, even though we're in the same company. So it's like Jeff said, it's just really a pleasure.

 Tyler Mason  15:00

Sure. Well now last question kind of forward looking here, as we look to 2024 and beyond what's next for PRO-TECH as you guys kind of look ahead?

 Aaron Swanson  15:06

Well, we got to, we got to catch our breath a little bit. If you look at the last, what, two years, we doubled our capacity in Texas, we purchased STI last year, and then this year, we're finishing a huge expansion in California. So our staff is a little weary. So we're gonna continue to grow. We've got lots of capacity, lots of new equipment, lots of new processes that we're excited about. And now for the future for us, it's just, you know, getting new customers in there, you know, telling them our message, working with them, filling all those machines in working that way. But yeah, it's the last few years even coming out of COVID, it's just been really, really exciting and busy for us. And so it's gonna be nice to not have construction costs or not sharing offices or doing something like that, and sort of settling out for the next year. But we want to continue to grow. We are, like we keep harping on we're a family company. That's the culture we really enjoy. And so we want to continue with that base. My son just joined the company. So now we're three generations. Our mother's still the active CEO, and still very active. So you know, it's a rare in this industry of mergers, acquisitions and private equity to have a third generation company and we really enjoy it. 

 Tyler Mason  16:21

What does he, what's your son do for the company?

 Aaron Swanson  16:23

He's a validation technician. So he's in charge of qualifying new equipment, so which we do a lot of so when new equipment shows up, he writes, all the protocols, gets it validated. He wants to learn the business overall. And as I want him to as well, but we're just plugging him in different places so he can learn the ins and outs of the industry.

 Tyler Mason  16:40

I should have asked you guys, I asked about working with your brother, what's it like working for your mom? 

 Aaron Swanson  16:44

It's interesting. We get along well as a family. She's more been on sales too, so you know, she's out there, she's a great relationship person. But yeah, it's still great. You know, we were very close as brothers growing up, which is really exciting. Our mom now is, you know, she's, you know, as a CEO, she's in the office less, enjoying her life more. And we're really excited to give that to her too. Because she's, you know, could have retired a long time ago and has worked really hard. But it's, you know, we want to continue to support her and everything she wants to do for futures. 

 Tyler Mason  17:16

And Jeff, anything else you want to add, just to kind of about the future of PRO-TECH or anything you're excited about as you look forward?

 Jeff Swanson  17:21

Actually, I'm really excited to fill the clean rooms and buy lots of equipment. As much as I like sales, I like to buy stuff as well. So it's very exciting. New technologies, new equipment. It's going to turn a new chapter. And so we're just very excited about all of that. And, you know, maybe another acquisition or another facility down the road. But we definitely want to feel what we have first

 Tyler Mason  17:46

when Aaron's in town to have to be tour guide again, or take him to some new spots or anywhere?

 Jeff Swanson 17:50

He's from here. So we pretty much drive to work together, he stays at my house and, you know, we hang out at night. So it's just it's a real big pleasure. And I do the same when I go to California, stay with him. And we just ride back and forth together and catch up on the last month or two that we haven't seen each other

 Aaron Swanson  18:08

Except that it is six o'clock in the morning. It's a 45 minute drive. It's a bit of a grind the first day. So today was you know, go to bed at 11:30 up at five o'clock in the morning.

 Tyler Mason  18:22

That's cool. Well, yeah. glad it worked out to have you both in studio here today. And thank you both for being here for taking time to be on the Medical Alley podcast. 

 Aaron Swanson  18:29

Much appreciated. Thank you.

 Jeff Swanson  18:30

Thank you very much, Tyler.

 Intro  18:31

And thanks everyone for listening to the podcast today with Aaron and Jeff Swanson of PRO-TECH Design and Manufacturing. Don't forget to subscribe to the Medical Alley Podcast if you haven't already. You can find us at medicalalleypodcast.org or wherever you get your podcasts: Spotify, Apple Podcasts or on our YouTube channel as well. Don't forget to share this episode with one other person to help spread the message a little bit further as well so we can keep telling the stories of great Medical Alley companies like PRO-TECH. Until next time, have a great day.